CREDIT NUMBER 7293-CG Financing Agreement (Accelerating Governance Institutional Reforms for Sustainable Services Operation) between REPUBLIC OF CONGO and INTERNATIONAL DEVELOPMENT ASSOCIATION CREDIT NUMBER 7293-CG FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between REPUBLIC OF CONGO ("Recipient") and INTERNATIONAL DEVELOPMENT ASSOCIATION ("Association"). (A) WHEREAS the Recipient has requested a financing from the Association, consisting of: (i) a program for results-financing for the financing of the Program (as described in Part I of Schedule 1 to this Agreement); and (ii) an investment project financing for the financing of the Project (as described in Part II of Schedule 1 to this Agreement, and referred to, collectively with the Program, as the "Operation"). (B) WHEREAS by agreement dated the same date as this Agreement (the "Loan Agreement"), the International Bank for reconstruction and Development ("Bank") has agreed to extend to the Recipient a credit in the amount of forty-two million five hundred thousand Euros (€42,500,000) for the purpose of assisting in financing the Operation. NOW, THEREFORE, the Recipient and the Association hereby agree as follows, with respect to the financing of the Operation. ARTICLE I GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II - FINANCING 2.01. The Association agrees to extend to the Recipient a credit, which is deemed as Concessional Financing for purposes of the General Conditions, in the amount of twenty-three million six hundred thousand Euros (€23,600,000) ("Credit"), to assist in financing the Operation described in Schedule 1 to this Agreement. » 2.02. The Recipient may withdraw the proceeds of the Credit in accordance with Section IV of Schedule 2 to this Agreement. All withdrawals from the Financing Account -2- shall be deposited by the Association into an account specified by the Recipient and acceptable to the Association. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1 %) per annum on the Unwithdrawn Financing Balance. 2.04. The Service Charge is the greater of: (a) the sum of three-fourths of one percent (3/4 of 1 %) per annum plus the Basis Adjustment to the Service Charge; and (b) three-fourths of one percent (3/4 of 1 %) per annum; on the Withdrawn Credit Balance. 2.05. The Interest Charge is the greater of: (a) the sum of one and a quarter percent (1.25%) per annum plus the Basis Adjustment to the Interest Charge; and (b) zero percent (0%) per annum; on the Withdrawn Credit Balance. 2.06. The Payment Dates are May 15 and November 15 in each year. 2.07. The principal amount of the Credit shall be repaid in accordance with the repayment schedule set forth in Schedule 3 to this Agreement. 2.08. The Payment Currency is Euro. ARTICLE III PROGRAM 3.01. The Recipient declares its commitment to the objective of the Program. To this end, the Recipient shall carry out the Program in accordance with the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV EFFECTIVENESS; TERMINATION 4.01. The Additional Conditions of Effectiveness consist of the following: (a) the Loan Agreement has been executed and delivered and all conditions precedent to its effectiveness (other than the effectiveness of this Agreement) have been fulfilled; and (b) the Recipient has developed and adopted an Operation Manual m accordance with Section LB of Schedule 2 to this Agreement. 4.02. The Effectiveness Deadline is the date one hundred twenty (120) days after the Signature Date. 4.03. For purposes of Section 10.05 (b) of the General Conditions, the date on which the obligations of the Recipient under this Agreement (other than thoseproviding for payment obligations) shall terminate is twenty (20) years after the Signature Date. -3- ARTICLE V REPRESENTATIVE; ADDRESSES 5.01. The Recipient's Representative is its minister in charge of finance. 5.02. For purposes of Section 11.01 of the General Conditions: (a) the Recipient's address is: Ministry of Economy and Finance Boulevard Denis Sassou Nguesso B.P.2083 Brazzaville Republic of Congo; and (b) the Recipient's Electronic Address is: E-mail: contact@finances. gouv.cg 5.03. For purposes of Section 11.01 of the General Conditions: (a) The Association's address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association's Electronic Address is: Telex: Facsimile: 248423 (MCI) 1-202-477-6391 -4- AGREED as of the Signature Date. REPUBLIC OF CONGO By Authorized Representative one (Odo,e fake re: /ti sh, d. /'sore eh wee_44#la, 23 Gao»eo INTERNATIONAL DEVELOPMENT ASSOCIATION By Name: Title: Date: -5- SCHEDULE 1 Operation Description The objective of the Operation is to increase efficiency of domestic resource mobilization and expenditure management, with a particular focus on health and education sectors. The Operation comprises the Program and the Project and consists of the following activities: Part I. The Program: Within the PFM Reform Program, the Program supports the following two priority areas for a period spanning from 2023 to 2026 (over the second phase and the beginning of the third phase of the PFM Reform Program): (i) increase efficiency in domestic resource mobilization; and (ii) modernize PFM and implement program budgeting. It expressly excludes the activities included in the Project. It comprises the following activities to improve the following results areas. Result Area 1 Increasing Efficiency in Domestic Resource Mobilization Modernization of tax and customs administrations in a manner which increases synergies between the tax, customs and treasury administrations, and increased transparency and accountability in the extractive industry. Result Area 2: Increasing efficiency ofexpenditure management with a particularfocus on health and education 2.A: Improving the Efficiency ofPublic Spending and Managing Climate-Related Fiscal Impacts Strengthening of budget management, by: (a) strengthening the assessment of fiscal risks (including those arising from climate change and adverse weather events); (b) implementing program budgeting; (c) improving procedures and organization of the accounting, budgetary and financial functions, to improve budget execution; (d) improving public procurement practices including green-procurement; (e) strengthening the management of public investment, with the integration of climate aspects in the regulatory texts that set out the modalities in the preparation, formulation and selection of projects, the development of the associated procedures manuals and tools for project preparation and selection, and the introduction of assessment and evaluation of expenditures; and (f) enhancing the effective internal and external oversight of public finances. , ,' -6- 2.B: Improving the efficiency ofpublic spending in the health and education sectors For each of the Borrower's ministries respectively responsible for health, primary, secondary, and technical education and vocational training, piloting the implementation of performance-based budgeting to improve allocative and spending efficiency in the health and education sectors, by: (a) improving budget preparation and execution; (b) using technology to access real-time budget information for decision-making to enhance service delivery; (c) improving public procurement management; (d) accelerating access to financing at the level of service providers; (e) facilitating citizens' access to budget execution data of service providers; and, for the ministry responsible for health only; and (f) improving budget planning and allocation for climate-related impacts in the health centers, particularly from waterborne diseases such as malaria. Part II. The Project: The Project includes the following activities: (a) Providing technical assistance and IT packages and carrying out studies to support the strengthening of capacity to manage fiscal risk and mobilize revenues, such as (i) reviewing, analyzing and providing guidance on: (A) options for the modernization of the tax and customs administrations; (B) how to introduce risk- based techniques in the tax and customs administrations; and (C) options for the optimization of the audit function for oil operators and the modeling of oil cost; and (ii) providing digital tools and training of staff to promote revenue mobilization efficiency. (b) Providing technical assistance and IT packages and carrying out studies to support the strengthening of capacity to improve the efficiency of public finance, such as: (i) reviewing, analyzing and providing guidance on: (A) the reorganization of ministries for the operationalization of program budgeting; (B) the institutionalization of performance contracts; (C) the procedures and processes for execution of program budgets; (D) the deconcentration of commitment controls and decentralization of budgetary control function in line ministries and relevant institutions; (E) the options for a better selection and monitoring of public investment projects; (F) the evaluation of procurement performance; (G) the incorporation of climate change and gender elements into the budget and reporting; (H) the introduction of performance-based and risk-based auditing techniques and tool; and (ii) providing digital tools and training of staff for public finance efficiency. (c) Providing technical assistance and IT packages and carrying out studies to support the strengthening of capacity to implement the Recipient's 2022-2026 National Development Plan, such as: (i) the design of a monitoring and evaluation system of the reforms; (ii) the preparation of key sectoral strategies and studies identified -7- in the Recipient's 2022-2026 National Development Plan for priority sectors; and (iii) the design and implementation of a communication strategy. (d) Providing technical assistance to support the strengthening of capacity to: (i) monitor and evaluate financial and technical partnerships; and (ii) implement performance management tools in the human resource management system. (e) Providing technical assistance and IT packages and carrying out studies to support the strengthening of capacity to deliver services in health and education, such as: (i) reviewing, analyzing and providing guidance on financing options to facilitate disbursement to the benefit of schools and health centers; and (ii) providing digital tools and training of staff on decision making to enhance service delivery. (f) Providing technical assistance and IT packages and carrying out studies to support the change management, verification of DLRs and audits, such as: (i) strengthening of capacity of national coaches for the application of the Recipient's rapid results initiative national; (ii) strengthening of capacity of the PCU-PRISP with respect to disbursement, monitoring and evaluation and audits, including the carrying out-the independent verification of and producing reports on the achievement ofthe DLRs; (iii) the development of a monitoring and evaluation system to track the implementation progress of the Program and evaluate its impacts; (iv) developing and providing training on data for decision making; (v) developing and operationalizing an ICT-based grievance redress mechanism; and (vi) developing a monitoring and evaluation system to track the level of satisfaction of beneficiaries and supporting civil society participation in oversight activities. -10- (b) the institutional, administrative, financial, technical and operational arrangements and procedures for the implementation of the Program, including the agreed Program Action Plan and the verification protocol agreed with the Association for the evaluation of the achievement of the DLis and their respective DLRs, the overall budget and detailed Program Expenditures; (c) the institutional, administrative, financial, technical and operational arrangements and procedures for the implementation of the Project; as well as (d) the arrangements and procedures applicable to the Operation (with their specificities depending on whether they relate to the Program or the Project), including detailed environmental and social risk mitigation measures and documents; financial management protocols and standards; detailed guidelines for the administration and flow of funds; procurement arrangements; guidance and protocols for the preparation and approval of Annual Work Plans and Budgets in consultation with the Recipient and the Association; and monitoring and evaluation requirements. 3. The Recipient shall refrain from materially and/or substantially amending, revising, waiving, voiding abrogating or suspending any provision of the Operation Manual, whether in whole or in part, without the prior written concurrence of the Association. 4. In the event of any inconsistency between a provision ofthe Operation Manual and those of this Agreement, the provisions of this Agreement shall prevail. C. Additional Implementation Arrangements Applicable to the Program Only I. Program Action Plan. (a) The Recipient shall carry out the Program Action Plan agreed with the Association, in accordance with the calendar and designated responsible parties set out in the said Program Action Plan, and in a manner satisfactory to the Association. (b) The Recipient shall refrain from materially and/or substantially amending, revising, waiving, voiding abrogating or suspending any provision of the Program Action Plan, whether in whole or in part, without the prior written concurrence of the Association. (c) In the event of any inconsistency between a provision of the Program Action Plan and those of this Agreement, the provisions ofthis Agreement shall prevail. -11- 2. Verification of the DLRs. (a) The Recipient shall, no later than ninety (90) days after the Effective Date, recruit and maintain at all time during the implementation of the Program, one or more independent verification agents with experience and qualifications and under terms of reference acceptable to the Association (the "Verification Agents"), as needed to: (i) verify the data and other evidence supporting the achievement of the DLis/DLRs listed in the Disbursement Table; and (ii) recommend corresponding disbursements to be made, as applicable, pursuant to the Disbursement Table, as may be further detailed in the Operation Manual. (b) The Recipient shall: (i) ensure that the Verification Agents carry out the DLis/DLRs' verification process(es) in accordance with the Verification Protocol; and (ii) submit to the Association the corresponding verification reports in a timely manner (at least once a year), and in form and substance satisfactory to the Association. 3. The Borrower shall ensure that the Program is carried out in accordance with the PFM Reform Program. D. Additional Implementation Arrangements Applicable to the Project Only 1. Annual Work Plans and Budgets for the Project. (a) The Recipient shall, by no later than November 30 of each Year during the implementation of the Project, prepare and furnish to the Association a proposed annual work plan and budget containing all activities proposed to be included in the Project during the following Year, and the proposed financing plan for the expenditures required thereunder, indicating the amounts and source of financing, all in accordance with the Operation Manual, each said annual work plan and budget of such scope and detail as the Association shall reasonably request. (b) The Recipient shall afford the Association a reasonable opportunity to exchange views with the Recipient on each such annual work plan and budget prior to its finalization and approval by the Steering Committee (once finalized in a manner which takes into account the Association's views, an "Annual Work Plan and Budget"), and, thereafter, ensure that the Operation is implemented with due diligence during said following Year in accordance with said Annual Work Plan and Budget. (c) The Recipient shall not make or allow to be made any change(s) to the approved Annual Work Plan and Budget, once approved, without the Association's prior written approval. -12- 2. Environmental and Social Standards Applicable to the Project. (a) The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. (b) Without limitation upon paragraph 1 above, the Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan ("ESCP"), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (i) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; (ii) sufficient funds are available to cover the costs of implementing the ESCP; (iii) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (iv) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. (c) In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. (d) The Recipient shall ensure that: (i) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (A) the status of implementation of the ESCP; (B) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (C) corrective and preventive measures taken or required to be taken to address such conditions; and (ii) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely -13- to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. (e) The Recipient shall establish, publicize, and thereafter maintain and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. Section II. Excluded Activities The Recipient shall ensure that the Program excludes any activities which: A. in the opinion of the Association, are likely to have significant adverse impacts that are sensitive, diverse, or unprecedented on the environment and/or affected people; or B. involve the procurement of: (1) works, estimated to cost US$75 million equivalent or more per contract; (2) goods, estimated to cost US$50 million equivalent or more per contract; (3) non-consulting services, estimated to cost US$50 million equivalent or more per contract; or (4) consulting services, estimated to cost US$20 million equivalent or more per contract. Section III. Operation Monitoring, Reporting and Evaluation The Recipient shall furnish to the Association each Project Reports and Program Report not later than forty-five (45) days after the end of each calendar semester, covering the calendar semester. Section IV. Withdrawal of the Proceeds of the Credit A. General 1. Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Credit to: (a) finance Program Expenditures (inclusive of Taxes), on the basis of the results ("Disbursement Linked Results" or "DLRs") achieved by the Recipient, as measured against specific indicators ("Disbursement Linked Indicators" or "DLis"); and (b) pay Eligible Expenditures for the Project; in the amount allocated to eachCategory; all as set forth in the table in paragraph 2 of this Part A. -14- 2. The following table specifies each category of withdrawal of the proceeds of the Credit (including the Disbursement Linked Indicators as applicable) ("Category"), the Disbursement Linked Results for each Category (as applicable), and the allocation of the amounts of the Credit to each Category: Category Disbursement Amount of the Percentage (including Linked Result (as Credit of Disbursement Linked applicable)' Allocated' Expenditures Indicator as (expressed in to be applicable) EUR} Financed (inclusive of Taxes) 3 (1) DLI #1: Increased 3,373,000 efficiency in mobilizing tax and customs revenues DLR 1. 1: The Recipient Yes/No: 1,012,000 35.7% has reorganized its tax and custom administration by specialties and functionalities (type of taxes, taxpayers, and taxable bases) m a manner consistent CEMAC Directives on tax and custom's organization DLR 1.2: The Recipient From a base line of 270 1,012,000 35.7% has reduced the number days, €945,000 when of days to treat tax reaching 240 days and disputes (scalable) €472,000 for each subsequent 15 day- reduction, up to a maximum allocated aggregate amount of €2,833,000 1 Formulas describing results required for disbursement (including amounts fromboth IDA and IBRD financings to calculate each DLR). 2 Total amount allocated from the IDA financing to the individual DLR. 3 The balance of 64.3% will be financed by IBRD. -15- DLRl .3: The Recipient From a base line of5%, 337,000 35.7% has increased €118,000 for the first the percentage of 20% increase and for the taxpayers in LTOs using each subsequent 10% mcrease, up to a online e-tax for tax filing and payment (scalable) maximum allocated aggregate amount of €945,000 DLR 1.4: The Recipient From a base line of276 1,012,000 35.7% has reduced the number hours, €709,000 when of hours for customs reaching 250 hours and clearance (scalable) for each subsequent 50 hour-reduction, up to a maximum allocated aggregate amount of €2,833,000. (2) DLI #2: 3,374,000 Implementation of per/ormance-based budgeting. DLR 2.1: The Recipient Yes/No: 675,000 35.7% has adopted its conceptual framework for programs and program budgets are aligned with the chart of accounts (prior result) DLR 2.2: The Recipient Yes/No: 675,000 35.7% has designated the program managers and heads of program operational units in line ministries in accordance with the regulation DLR2.3: The From a baseline of 0, 1,012,000 35.7% Recipient's ministries in €236,000 per ministry charge of health, when reaching at least primary and secondary 3 new ministries each education, and year, up to a maximum vocational training, allocated aggregate respectively, and other amount of €2,833,000 ministries have each -16- prepared their program action plan to plan and prioritize their needs as part of the preparation of the finance law (scalable) DLR 2.4: The From a baseline of 0, 1,012,000 35.7% Recipient's ministries in €236,000 per ministry charge of health primary when reaching at least and secondary education 3 new ministries each and vocational training, year, up to a maximum respectively, allocated aggregate respectively, and other amount of €2,833,000 ministries have each prepared an annual performance report before the end of first trimester following the fiscal year to which it relates (scalable) (3) DLI #3: Increased 3,027,000 transparency and efficiency in public procurement DLR 3.1: The Borrower From a baseline of 2,015,000 35.7% has increased the 45%, €945,000 for percentage of public each 5% increase, up to contracts (weighed by a maximum allocated contract value) which are aggregate amount of awarded through a €5,666,000 competitive tender process (scalable) DLR3.2: The Borrower From a baseline of 1,012,000 35.7% has increased the 30%, €472,500 for each percentage of public 10% increase, up to a contracts (weighed by maximum allocated number) which are aggregate amount of signed by all parties €2,833,000. during the period of validity of the tender, (scalable) -17- (4) DLI #4: Improved 3,373,000 efficiency of public investments DLR 4.1: The Recipient Yes/No: 1,012,000 35.7% has approved a regulation which sets forth the modalities for the preparation, design and selection of projects, taking into account the climate aspects. (prior result) DLR 4.2: The Recipient From a baseline of 5%, 2,361,000 35.7% has increased the €472,500 for every 5% percentage of new increase, up to a public investment maximum allocated projects in the finance aggregate amount of law with studies €6,615,000. validated by CNEEPIP and screened for climate change mitigation and adaptation (scalable) (5) DLI #5: Increase in 2,698,000 availability of operating grants to frontline providers in health and education DLR 5.1: The Recipient From a baseline of 0, 1,349,000 35.7% has increased the €236,000 for each 5% percentage of health and increase, up to a education (primary, maximum allocated secondary, and aggregate amount of vocational training) €3,780,000 budget appropriation by the national budget director to the departments and municipalities made in ¥ ,' compliance with Article 7()of the Recipient's decree no. 2022-1875 -18- dated October 29, 2022, on the modalities of budget allocations and priority disbursement of funds for general education schools and health centers (scalable) DLR 5.2: The Recipient From a baseline of 0, 1,349,000 35.7% has increased the €236,000 for each 5% percentage of mcrease, up to a disbursement of maximum allocated subsidies made to health aggregate amount of centers and pnmary, €3,780,000 secondary, and vocational training schools) by the departments and municipalities, in compliance with Article 7(2) of the Borrower's decree no. 2022-1875 dated October 29, 2022, on the modalities of budget allocations and priority disbursement of funds for general education schools and health centers (scalable) (6) DLI #6: Increased 2,698,000 availability offinancial execution information from frontline service providers in health and education DLR 6.1: Number of From a baseline of 0, 1,349,000 35.7% primary, secondary, and €94,500 for each 50- vocational training schools increase, up to schools with a financial a maximum allocated execution report (budget aggregate amount of and own resources) €3,780,000 adopted by the school -19- management committee and published (scalable) DLR 6.2: Number of From a baseline of 0, 1,349,000 35.7% health centers with a €47,250 for each 25- financial execution health centers increase, report (budget and own up to a maxrmum resources) adopted by allocated aggregate the health center amount of €3,780,000 committee and published (scalable) (7) Goods, non- NIA 5,057,000 35.7% consulting services, consulting services, Training and Workshops, and Incremental Operating Costs for the Project TOTAL AMOUNT 23,600,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made: (a) on the basis of DLRs achieved prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed €4,725,000 may be made on the basis of DLRs achieved prior to this date but between April 11, 2022 and the Signature Date; or/and (b) for any DLR under Category (1) to (6), until and unless the Recipient has furnished evidence satisfactory to the Association that said DLR has been achieved; or/and (c) under Category (7) until and unless the Association has received evidence that the grievance mechanism under ESS 10, Section 10.2 of the ESCP, has been established, publicized, adopted and is operational, in form and substance satisfactory to the Association. 2. Notwithstanding the provisions of Part B.1 (b) of this Section, the Recipient may withdraw: (i) an amount not to exceed €10,395,000 as an advance; provided, however, that if the DLRs in the opinion of the Association, are not achieved (or only partially achieved) by the Closing Date, the Recipient shall refund such advance (or portion of such advance as determined by the Association in accordance with the formulas in the Disbursement Table) to the Association promptly upon notice thereof by the Association. Except as otherwise agreed with -20- the Recipient, the Association shall cancel the amount so refunded. Any further withdrawals requested as an advance under any Category shall be permitted only on such terms and conditions as the Association shall specify by notice to the Recipient. 3. Notwithstanding the provisions of Part B.l(b) of this Section, if the scalable DLRs under Category (1.2), (1.3), (1.4), (2.3), (4.2), (5.1), (5.2), (6.1) or (6.2) have not been achieved, the Association may, by notice to the Recipient: (a) authorize the withdrawal of such lesser amount of the unwithdrawn proceeds of the Credit then allocated to said Category which, in the opinion of the Association, corresponds to the extent of achievement of said DLR, said lesser amount to be calculated in accordance with the formula set out in the Disbursement Table; (b) reallocate all or a portion of the proceeds of the Credit then allocated to said DLR to any other DLR; and/or (c) cancel all or a portion of the proceeds of the Credit then allocated to said DLR. 4. The Closing Date is June 30, 2027. -21- SCHEDULE3 Repayment Schedule Principal Amount of the Credit Date Payment Due repayable (expressed as a percentage) On each May 15 and November 15: commencing May 15, 2028 to and including 1.65% November 15, 2047 commencing May 15, 2048 to and including 3.40% November 15, 2052 The percentages represent the percentage of the principal amount of the Credit to be repaid, except as the Association may otherwise specify pursuant to Section 3. 05 (b) of the General Conditions. -22- APPENDIX Definitions 1. "Anti-Corruption Guidelines" means the Program Anti-Corruption Guidelines and/or the Project Anti-Corruption Guidelines, as applicable. 2. "Annual Work Plan and Budget" means the yearly work plans and budgets for the Project prepared and approved by the Recipient incorporating the views of the Association, all pursuant to Section I.D.1 of Schedule 2 to this Agreement and the protocols and requirements further elaborated in the Operation Manual. 3. "Basis Adjustment to the Interest Charge" means the Association's standard basis adjustment to the Interest Charge for credits in the currency of denomination of the Credit, in effect at 12:01 a.m. Washington, D.C. time, on the date on which the Credit is approved by the Executive Directors of the Association, and expressed either as a positive or negative percentage per annum. 4. "Basis Adjustment to the Service Charge" means the Association's standard basis adjustment to the Service Charge for credits in the currency of denomination of the Credit, in effect at 12:01 a.m. Washington, D.C. time, on the date on which the Credit is approved by the Executive Directors of the Association, and expressed as a percentage per annum. 5. "Category" means a category set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. 6. "CEMAC" means the Central African Economic and Monetary Community. 7. "CEMAC Directives" means the three following directives on tax and custom's organization adopted by the CEMAC: (i) Directive no. 01/04-UEAC-177 U-CM- 12 dated July 30, 2004; (ii) Directive no. 11/22-CEMAC-UEAC-0l0A-CM-38 dated November 10, 2022; and (iii) Directive no. 13/22-CEMAC-UEAC-0l0A- CM-38 dated November 10, 2022. 8. "CNEEPIP" means Centre national d'etudes et d'evaluation des projets d'investissement public (National center for studies and evaluation of public investment projects), an agency established by the Recipient's law no. 34-2018 dated October 5, 2018. 9. "Disbursement Linked Indicator" or "DLI" means in respect of a given Category, the indicator related to said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement. -23- 10. "Disbursement Linked Result" or "DLR" means in respect of a given Category, the result under said Category as set forth in the table in Section IV.A.2 of Schedule 2 to this Agreement, on the basis of the achievement of which, the amount of the Credit allocated to said result may be withdrawn in accordance with the provisions of said Section IV. 11. "Disbursement Table" means the table in Section IV.A.2 of Schedule 2 to this Agreement. 12. "Environmental and Social Commitment Plan" or "ESCP" means the environmental and social commitment plan for the Project, dated March 8, 2023, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. 13. "Environmental and Social Standards" or "ESSs" means, collectively: (i) "Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts"; (ii) "Environmental and Social Standard 2: Labor and Working Conditions"; (iii) "Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management"; (iv) "Environmental and Social Standard 4: Community Health and Safety"; (v) "Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement"; (vi) "Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources"; (vii) "Environmental and Social Standard 7: Indigenous Peoples/Sub- Saharan Historically Underserved Traditional Local Communities"; (viii) "Environmental and Social Standard 8: Cultural Heritage"; (ix) "Environmental and Social Standard 9: Financial Intermediaries"; (x) "Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure"; effective on October 1, 2018, as published by the Association. 14. "General Conditions" means, collectively (unless the context otherwise require), the Program General Conditions and the Project General Conditions. In such cases, capitalized definitions are the same in both sets of General Conditions. In cases where the capitalized definition defers, the term will be defined in this Appendix. 15. "Incremental Operating Costs" means the incremental operating expenses of the PCU-PRISP, based on annual budgets approved by the Association, on account of the Project, consisting of operation and maintenance costs of office, vehicles; water and electricity utilities, telephone, office supplies, bank charges, salaries of contractual staff, travel and supervision costs including per diem, but excluding -24- the salaries, indemnities and meeting allowances, other sitting allowances, salary top ups and all honoraria of officials and public servants of the Recipient's civil service. 16. "Loan Agreement" means the loan agreement for the Operation between the Recipient and the Association, dated the same date as this Agreement, as such loan agreement may be amended from time to time. "Loan Agreement" includes all appendices, schedules and agreements supplemental to the Loan Agreement. 17. "LTOs" means the taxpayers qualifying as large taxpayers under the Recipient's Tax Code ("Code General des Impots '') (Articles 26 to 28). 18. "Operation" means, collectively, all activities described under the Program and the Project in Schedule to this Agreement. 19. "Operations Manual" means the manual developed and adopted by the Recipient for the carrying out of the Project and the Program, pursuant to Article 4.01 of this Agreement, in accordance with the provision of Section I.B.1 of Schedule 2 to this Agreement. 20. "PCU-PRISP" means the project coordination unit established by the Recipient's decree no. 2018-384 dated October 11, 2018, for the creation, attributions and organization of the public sector integrated reforms project's coordination unit, with modifications in accordance with Section I.A.4(a) of Schedule 2 to this Agreement. 21. "PFM" means public finance management. 22. "PFM Reform Program" means the Recipient's PFM Reform Program documented in the 2020-2029 PFM Strategy ("Plan strategique de reforme du systeme de gestion desfinances publiques") validated by the Recipient's minister in charge of budget dated August 5, 2020, to be adopted by the Borrower's government4 in alignment with its 2022-2026 National Development Plan, which focuses on the following four priority areas, covering 2020-2029 for an estimated cost equivalent to US$135,000,000: (i) increase efficiency on domestic mobilization, (ii) modernize PPFM and implement program budgeting, (iii) rationalize debt management and increase sustainability of public finance; and (iv) strengthen the management of PFM reforms. 23. "PFM Permanent Secretariat" means the Recipient's committee established in accordance with the Recipient's decree no. 2021-673 dated December 31, 2021, on the organization of its ministry of finance, budget and public portfolio, having attributions and organization as spelled out in the Recipient's decree no. 2022-423 4 Prior to implementing the Program, the Recipient shall adopt the PFM Reform Program. -25- dated July 22, 2022 on the attribution and organization ofthe permanent secretariat for public finance reforms. 24. "Procurement Regulations" means, for purposes of paragraph 87 of the Appendix to the Project General Conditions, the "World Bank Procurement Regulations for IPF Borrowers", dated November 2020. 25. "Project" means the activities described in Part II of the Operation. 26. "Project Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the General Conditions, the "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. 27. "Project General Conditions" means the "International Development Association General Conditions for IDA Financing, Investment Project Financing", dated December 14, 2018 (revised on August 1, 2020, April 1, 2021, and January 1, 2022). 28. "Program" means the activities described in Part I of the Operation. 29. "Program Action Plan" means the Recipient's plan dated March 7, 2023 and referred to in Section LC. I of Schedule 2 to this Agreement, setting out the actions that the Recipient will need to take to address gaps identified in the current fiduciary and environmental and social system and complaints, as such plan may be amended from time to time with the agreement of the Association. 30. "Program Anti-Corruption Guidelines" means, for purposes of paragraph 5 of the Appendix to the Program General Conditions, the Association's "Guidelines on Preventing and Combating Fraud and Corruption in Program-for-Results Financing," dated February 1, 2012, and revised July 10, 2015. 31. "Program General Conditions" means the "International Development Association General Conditions for IDA Financing, Program-for-Results Financing", dated December 14, 2018 (revised on August 1, 2020, April 1, 2021, and January 1, 2022. 32. "Signature Date" means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applies to all references to "the date of the Financing Agreement" in the General Conditions. 33. "Steering Committee-PRISP" means the committee established by Recipient's , decree no. 2018-383 dated October 11, 2018, for the creation, attributions and composition of the public sector integrated reforms project's steering committee, -26- with modifications in accordance with Section I.A.2(a) of Schedule 2 to this Agreement. 34. "Strategic Committee" means the committee to be established by the Recipient in accordance with Section I.A. I of Schedule 2 to this Agreement. 35. "Training and Workshops" means the reasonable cost of trainings, study tours, conferences and workshops conducted and/or attended by the Recipient's officers and personnel, in the territory of the Recipient or, subject to the Association's prior no objection, overseas, including the purchase and publication of materials, rental of facilities, course fees, and lodging, travel expenses and per diems for trainers and/or trainees, as approved by the Association in an Annual Work Plan and Budget. 36. "Verification Agents" means the consultant or consultants, government agency/ies and/or panel(s) of experts to be selected/appointed in accordance the provision of Section I.C.2(a) of Schedule 2 to this Agreement. 37. "Verification Protocol" means the verification protocol agreed between the Recipient and the Association, which shall form part of the Operation Manual, setting forth the basis and methodology for verification of the achievement of Disbursement-Linked Results, as the same may be modified from time to time with the prior written agreement of the Association. 38. "Year" means an uninterrupted period of consecutive days, starting on the Effective Date for the first period and on January 1 for each subsequent period, and ending on December 31 except for the last period which ends on the Closing Date.